If your forex trading is purely based on luck, then you might as well consider yourself a gambler. Although there are many trading strategies in the market, trying to master all of them will only leave your head spinning. Forex trading aims to make your life easier, and the use of easy and simple strategies make it an even richer experience.
For best trading results, we highly recommend learning and mastering no more than three methods to be able to gain regular profits and not end up spending too much of your time trading. In this guide, we will review some of the simplest, yet best strategies for beginner traders and more complex, high-risk strategies that allow you to make big profits, but at a higher risk.
Best Strategies to Trade on Expert Option
When trading on expert option, all strategies are founded on an array of signals depending on your chosen analysis methods.
Technical Analysis Method
These strategies are used to forecast future price movements through the analysis of current and past market action.
This method of analysis examines the candlestick movement on the chart. Each pattern symbolizes a tendency continuation or reverse. Here are two of the most popular patterns
Engulfing candlestick trading strategy
This chart pattern gives a reversal signal that occurs when the candlestick’s body is significantly bigger than the last one. The candlestick also takes on a reverse direction. Once you see such a signal, prepare to check the direction of the succeeding candlestick. If it takes on an engulfing direction, trade on the next candlestick. This strategy allows traders to enter the market just as momentum is picking up.
Squat candlestick strategy
This candlestick tells traders about the market’s uncertainty in the actual direction. These signals usually appear at crucial price levels. If you see a candlestick whose body is significantly smaller and with a long shade, prepare for a change of state of the present tendency.
Tweezers Candlestick Strategy
This is another strong reversal signal. This signal comprises of two candlesticks which take on different directions and similar highs and lows. This signal occurs at the top of up-trends and the bottom of downtrends.
Three Methods Strategy
This signal appears when there is a trend pause on the chart. It usually looks like small candlesticks and precedes a long candlestick. A big candlestick moving towards the trend direction closes a pattern and gives a continuation signal. Traders should open a trade once they close this candlestick.
Working with Strength Level signals
Strength levels are the points where price charts stop or reverse. Using these signals to identify price levels for different assets makes it easier for traders to choose the best trading times.
There are two key strategies when working with strength levels;
This strategy requires traders to open trades when the price graph breaks out at present levels and continues moving in the same inclination. Traders should open a trade once the candlestick’s body breaks out a current resistance or support level and new candlesticks move in the same tendency on the chart.
The reversal strategy is based on the change in the price direction of an asset. This strategy requires traders to open a trade once the price chart reverses. If a candlestick reaches the level and does not close outside it, traders should start trading. The candlestick can touch this level with either its body or shade. If for instance, the candlestick gets closed inside at a certain strength level with its shade touching it, this means price will not be in a position to surpass it.The signal confirmation will occur when a new candlestick appears in a reverse direction.
This analysis is based on the use of chart indicators to find the perfect entry point. Currently, there are 3 main indicators for this analysis:
Moving averages strategies
The moving average and price chart line give two different types of signals.
A tendency reversal occurs when a price chart crosses the moving average line
A tendency continuation is when the price bounces off the moving average.
To get these signals, traders are required to install a moving average indicator that comes with a long time period. Also, you should know that you will be required to choose a different period for each of these tools.
Alligator is an interesting indicator that shows the beginning of a trend movement in the financial markets. This strategy believes that traders tend to make the most profits during strongly trending periods. It lets you catch the transition from hibernation to active trend, allowing you to make maximum profit.
Bollinger band strategy
Bollinger bands are a great and easy strategy to use. These bands can replace trend channels since they show the range towards which the price is moving. They form a channel around the price movement of an asset. They can help you establish a trend’s direction, identify potential reversals and monitor volatility, allowing you to make better trading decisions.
When working with these bands, you can also use the signal where the price sharply breaks the band and returns back to the central indicator line. Once this signal appears, wait until the price moves outside the indicator, it returns inside, and confirm that the candlestick closes. Only then should you open a deal directed towards the central indicator line.
As a trader, it is important to know that markets often react to news publications. Hence, if the current news is strong, you can expect a hefty price movement. Although this trading strategy is quite risky, you can make quite a hefty profit in a matter of minutes.
You can also lose just as much of your assets in a few minutes.
When using this trading strategy, it is important to know which releases are expected that week and which data is important. Also, it is crucial that you are vigilant with risk management.
For any trader looking to gain stability in making profits, it is crucial that you have a strong money management strategy in place. One of the top money management strategies is tracking your financial loss. Start by defining a loss limit level. This acts as a gauge on where and when to stop trading to review the strength of your trading strategy.
It is important to know that there is no one known best expert option strategy or blueprint to make money. Therefore, use these suggested strategies and tweak them based on how you perceive various aspects affect financial markets.